constitutional limitations on state long arm jurisdiction

COMMENTS

Constitutional Limitations on State LongArm Jurisdiction

In International Shoe Co. v. Washington,' the Supreme Courtdefined due process limitations on state jurisdiction over nonresi-dents in terms of the "fair" result on the merits of each case,2 re-jecting the application of fixed rules.3 This emphasis has led thecourts to use a balancing test in determining whether jurisdictionover a nonresident violates due process.4 In World-Wide Volks-wagen Corp. v. Woodson,5 however, the Court recently suggestedthat due process is provided only if persons can predict with somecertainty where their conduct "will and will not render them liableto suit."6

Predictable results require fixed rules and principles that de-fine the constitutional limits of state long arm jurisdiction.7 This

1 326 U.S. 310 (1945).Id. at 316 (minimum contacts requirement ensures that maintenance of the suit "does

not offend 'traditional notions of fair play and substantial justice' ") (quoting Milliken v.Meyer, 311 U.S. 457, 463 (1940)).

3 326 U.S. at 319 ("It is evident that the criteria by which we mark the boundary linebetween those activities which justify the subjection of a corporation to suit, and thosewhich do not, cannot be simply mechanical or quantitative."). See also In-Flight DevicesCorp. v. Van Dusen Air, Inc., 466 F.2d 220, 235-36 (6th Cir. 1972); Gray v. American Radia-tor & Standard Sanitary Corp., 22 IMI. 2d 432, 440, 176 N.E.2d 761, 765 (1961).

" See text and notes at notes 21-28 infra.5 444 U.S. 286 (1980).1 Id. at 297 ("The Due Process Clause, by ensuring the 'orderly administration of the

laws,' gives a degree of predictability to the legal system that allows potential defendants tostructure their primary conduct with some minimum assurance as to where that conductwill and will not render them liable to suit.") (quoting International Shoe Co. v. Washing-ton, 326 U.S. 310, 319 (1945)). See also Louis, The Grasp of Long Arm Jurisdiction FinallyExceeds its Reach: A Comment on World-Wide Volkswagen Corp. v. Woodson and Rush v.Savchuk, 58 N.C.L. REV. 407, 430-32 (1980) (World-Wide rejected the traditional balancingapproach in favor of a "bright line" test).

' The Supreme Court's inability to devise a set of rules for universal application ishighlighted by the divisions on the Court in its recent decisions on the issue. Justice Whitewrote for the majority in World-Wide, yet he joined Justice Brennan's dissent in Kulko v.Superior Court, 436 U.S. 84, 101 (1978). Justice Marshall wrote the majority opinion in

Long Arm Jurisdiction

comment attempts to set forth such a set of principles to governthe exercise of long arm jurisdiction." Rejecting the balancing ap-proach, it first outlines the three requirements that ensure ade-quate due process protection to nonresident defendants. Theseminimum requirements-causation, notice, and relevance-allowstates wide latitude in asserting long arm jurisdiction. Using com-mercial cases as an illustration, the comment then considers addi-tional limitations on long arm jurisdiction mandated by other pro-visions of the Constitution and necessary because of the nature ofthe defendant's underlying conduct.

I. A PROPOSED CONSTITUTIONAL FRAMEWORK FOR JURISDICTIONAL

ANALYSIS

A. Minimum Contacts and State Long Arm Statutes

The due process clause permits a state to exercise jurisdictiononly where "minimum contacts" exist between the defendant andthe forum.' This requirement protects a defendant from "the bur-dens of litigating in a distant or inconvenient forum" 10 by ensuringthat it is "reasonable" to require him to defend the suit in the fo-rum state.11 The minimum contacts rule also protects the "orderlyadministration of the laws ' 12 by preventing states from "reach[ing]out beyond the limits imposed on them by their status as coequalsovereigns in a federal system. '1 3

By enacting a long arm statute, a state exercises its constitu-tional prerogative to assert jurisdiction over nonresidents who haveminimum contacts with it. These statutes provide for limited per-sonal jurisdiction over nonresidents whose actions have caused in-juries within the state.1 4 Jurisdiction is specific, 5 extending only to

Kulko and dissented in World-Wide, 444 U.S. at 313. Justice Brennan dissented in bothcases, 444 U.S. at 299; 436 U.S. at 101. Justice Powell was with the majority in World-Wideand the dissenters in Kulko, 436 U.S. at 101. Justice Blackmun was in the majority in Kulkoand dissented in World-Wide, 444 U.S. at 313. Chief Justice Burger and Justices Stevens,Rehnquist, and Stewart voted with the majority in both cases.

8 On the nature of long arm jurisdiction, see text and notes at notes 14-16 infra." See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980); Shaffer v.

Heitner, 433 U.S. 186, 204 (1977) (minimum contacts analysis focuses on "the relationshipamong the defendant, the forum, and the litigation"); International Shoe Co. v. Washington,326 U.S. 310, 316 (1945).

10 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980).Id. (quoting International Shoe Co. v. Washington, 326 U.S. 310, 317 (1945)).

2 International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945).iS World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)." Long arm statutes vary in breadth. The California statute, for example, provides that

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causes of action related to the in-state effects of a defendant'sactivities."6

B. A Balancing Test Versus Fixed Rules

It generally is agreed that a state cannot assert jurisdictionover a nonresident defendant unless at least three conditions aresatisfied: the defendant must have caused an effect in the forum,

17

he must have had fair notice at the time of his act that it wouldcause an effect in the forum,18 and that effect must be related to

"[a] court of this state may exercise jurisdiction on any basis not inconsistent with the Con-stitution of this state or of the United States." CAL. CIV. PRoc. CODE § 410.10 (West 1973).Statutes in most states are more restrictive, typically enumerating specific events and trans-actions-doing business in the state, committing a tort or causing a tortious effect in thestate, owning property in the state-and providing that causes of action arising from theseacts support personal jurisdiction over nonresidents involved in them. See, e.g., N.Y. Civ.PRAc. LAw § 302 (McKinney 1972). In states that specify particular contacts, two questionsmust be answered when jurisdiction is asserted under a long arm statute: whether the con-tact falls within the scope of the statute, and if so, whether the state's exercise of jurisdic-tion is constitutional. F. JAMEs & G. HAZARD, CIVIL PROCEDURE § 12.14 (2d ed. 1977). Thepractical differences between the two approaches may be slight. The Minnesota statutespecifies particular contacts, MINN. STAT. REV. § 543.19 (West Supp. 1980), but has beeninterpreted "to assert in personam jurisdiction over nonresidents to the maximum extentconsistent with due-process." Marquette Nat'l Bank v. Norris, 270 N.W.2d 290, 294 (Minn.1978).

15 The rules and principles outlined in this comment are irrelevant to determiningwhether a state may assert general jurisdiction over a defendant. In deciding this question,the court must examine the entire relationship between the defendant and the forum, notjust the elements of that relationship connected to the particular cause of action. See vonMehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 HARv. L. REv.1121, 1144-45 (1966).

16 On the nature of long arm jurisdiction, see generally R. CRAMTON, D. CURRIE & H.KAY, CONFLICT OF LAWS: CASES-CoMMENTS-QuEsTIONs 528-58 (2d ed. 1975); F. JAMES & G.HAZARD, supra note 14, § 12.14; RESTATEMENT (SEcoND) OF CONFLICT OF LAWS § 37 (1971)[hereinafter cited as RESTATEMENT]; R. WEINTRAUB, COMmENTARY ON TE CoNFLir OF LAWS§§ 4.7-.21 (2d ed. 1980); Brilmayer, How Contacts Count: Due Process Limitations on StateCourt Jurisdiction, 1980 Sup. CT. REv. 77; Carrington & Martin, Substantive Interests andthe Jurisdiction of State Courts, 66 MIcH. L. REV. 227 (1967); Currie, The Growth of theLong Arm: Eight Years of Extended Jurisdiction in Illinois, 1963 U. ILL. L.F. 533; Woods,Pennoyer's Demise: Personal Jurisdiction After Shaffer and Kulko and a Modest Predic-tion on World-Wide Volkswagen Corp. v. Woodson, 20 ARIZ. L. REv. 861 (1978); Develop-ments in the Law-State-Court Jurisdiction, 73 HARv. L. Rav. 909 (1960) [hereinafter citedas Developments]; Note, Long-Arm Jurisdiction in Commercial Litigation: When is a Con-tract a Contact?, 61 B.U.L. Rxv. 375 (1981); Note, World-Wide Volkswagen Corp. v. Wood-son: A Limit to the Expansion of Long-Arm Jurisdiction, 69 CALI. L. REv. 611 (1981)[hereinafter cited as California Note]; Comment, Federalism, Due Process and MinimumContacts: World-Wide Volkswagen Corp. v. Woodson, 80 COLUM. L. REv. 1341 (1980).

1? See text and notes at notes 48-66 infra.18 See text and notes at notes 67-85 infra.

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the cause of action. 19 A few courts have viewed these three pre-requisites as the only limitations on the reach of state long armstatutes.20

The consensus among courts2 1 and commentators,2 2 however,is that a balancing test should be used to determine whether astate may extend its long arm to a particular defendant. Typically,the defendant's interest in not being unfairly haled before a for-eign court2" is balanced against the plaintiff's interest in his chosenforum, 4 the judicial system's interest in having the suit tried inthe forum state,2 5 and the forum's interest in asserting jurisdic-tion.2 6 Some advocates of balancing propose a two-step approachwhereby a court first determines whether a defendant knowinglycaused a relevant event to occur within the forum; if he did, thecourt then balances the factors outlined above to determine the"fairness" of asserting jurisdiction. 7 Others propose forgoing the

19 See text and notes at notes 86-91 infra. The relevance requirement serves a purposemore akin to federalism than fairness, permitting jurisdiction only where an event gives thestate a legitimate interest in the cause of action. See Woods, supra note 16, at 883; Com-ment, supra note 16, at 1345-49. See also Brilmayer, supra note 16, at 84.

20 See Pedi Bares, Inc. v. P&C Food Mkts., Inc., 567 F.2d 933, 937 (10th Cir. 1977);Duple Motor Bodies, Ltd. v. Hollingsworth, 417 F.2d 231, 235 (9th Cir. 1969); Electro-CraftCorp. v. Maxwell Elecs. Corp., 417 F.2d 365, 368-69 (8th Cir. 1969). See also cases citedinfra note 35.

"' In addition to the Supreme Court cases cited at notes 23-26 infra, see, for example,Nova Biomedical Corp. v. Moller, 629 F.2d 190, 193 n.3 (1st Cir. 1980); Caesar's World, Inc.v. Spencer Foods, Inc., 498 F.2d 1176, 1180 (8th Cir. 1974); Wright v. Yackley, 459 F.2d 287,290 n.7 (9th Cir. 1972); Chancellor v. Lawrence, 501 F. Supp. 997, 1001 (N.D. I1. 1980);Blamey v. Brown, 270 N.W.2d 884, 887 (Minn.), cert. denied, 444 U.S. 1070 (1978).

22 See, e.g., RESTATEmENT, supra note 16, § 37 caveat a, para. 4 (1971); Carrington &Martin, supra note 16, at 230-31; Woods, supra note 16, at 890-98; Developments, supranote 16, at 924-25.

23 This factor is "always a primary concern." World-Wide Volkswagen Corp. v. Wood-son, 444 U.S. 286, 292 (1980).

2' See Kulko v. Superior Court, 436 U.S. 84, 92 (1978); Shaffer v. Heitner, 433 U.S. 186,211 n.37 (1977). Some have suggested that jurisdiction may be asserted over a defendantwith no forum contacts at all if the plaintiff has no alternative forum in which to sue thedefendant. See Brihmayer, supra note 16, at 108-10; Woods, supra note 16, at 894; CaliforniaNote, supra note 16, at 629-30.

25 See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980); Interna-tional Shoe Co. v. Washington, 326 U.S. 310, 319 (1945) (court must balance "the qualityand nature of the activity in relation to the fair and orderly administration of the lawswhich it was the purpose of the due process clause to insure"); Woods, supra note 16, at893-94.

" See McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957); Carrington &Martin, supra note 16, at 233-37; Woods, supra note 16, at 893; California Note, supra note16, at 630; Comment, supra note 16, at 1345-49. See also cases discussed infra note 39.

27 See, e.g., Bangor Punta Operations, Inc. v. Universal Mach. Co., 543 F.2d 1107, 1110(5th Cir. 1976); Aanestad v. Beech Aircraft Corp., 521 F.2d 1298, 1300 (9th Cir.), cert. de-

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initial inquiry; once the court has determined that the defendantcaused a relevant effect in the forum, it uses balancing alone todecide whether to assert jurisdiction.2

The balancing approach has two fundamental flaws. First, be-cause it is unpredictable, it offers no guidance to persons seekingto avoid being subject to a state's jurisdiction. 29 Each decision istoo fact-bound for general application, and the weight given toeach competing variable is left to the discretion of individualjudges. Given this discretion, state courts often resolve close casesin their own favor, thereby steadily and inappropriately expandingjurisdiction.30 Moreover, because the balancing approach considersfactors the defendant can neither anticipate nor control, it is im-possible for individuals to predict with any certainty where theirconduct will render them subject to suit.3 1 For example, some

nied, 419 U.S. 998 (1974); Thorington v. Cash, 494 F.2d 582, 587 (5th Cir. 1974); Woods,supra note 16, at 862, 881-82; cf. RESTATEMENT, supra note 16, § 37 caveat a (court shouldautomatically assert jurisdiction if the defendant intentionally caused an effect in the fo-rum, but the balancing test applies if the defendant could only have reasonably anticipatedthat his conduct would affect the forum).

28 See, e.g., Carrington & Martin, supra note 16, at 230. Advocates of this approachhave argued that in products liability actions, jurisdiction should be asserted over a manu-facturer even if he could not foresee the presence of his product in the forum. See Phillips v.Anchor Hocking Glass Corp., 100 Ariz. 251, 259-60, 413 P.2d 732, 737-38 (1966); Comment,In Personam Jurisdiction over Nonresident Manufacturers in Product Liability Actions,63 MICH. L. REv. 1028, 1031-32 (1965).

29 See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (due pro-cess "gives a degree of predictability to the legal system"). World-Wide seems to move awayfrom traditional balancing because of its unpredictability. Although the Court acknovledgedthe competing variables in due process analysis, id. at 292, it focused on the defendant'scontacts with the forum, finding "a total absence of those affiliating circumstances that are anecessary predicate to any exercise of state-court jurisdiction," id. at 295. Justice Brennanin dissent criticized the Court for not weighing other factors and noted that the Court previ-ously had "declined to establish a mechanical test based on the quantum of contacts be-tween a State and the defendant. . . ." Id. at 300 (construing Kulko v. Superior Court, 436U.S. 84, 92 (1978)). See generally Kennedy, Form and Substance in Private Law Adjudica-tion, 89 HARv. L. REv. 1685, 1687-89 (1976) (distinguishing two different legal methods: theapplication of general rules, which has the advantage of certainty, and the use of an equita-ble standard to produce ad hoc decisions); Reese, Choice of Law: Rules or Approach, 57CORNELL L. REV. 315, 316 (1972) (contrasting rules, which provide certainty and predictabil-ity, with "approach," which weighs competing factors).

" Louis, supra note 6, at 430-32. But see Jay, Minimum Contacts As A Unified Theoryof Personal Jurisdiction: A Reappraisal, 59 N.C.L. REv. 429, 457-58 (1981) (state courtshave exercised restraint in defining the proper reach of the long arm).

31 Even proponents of balancing admit that predictability is impossible. CaliforniaNote, supra note 16, at 630 ("One cannot deny that the balancing approach grants thecourts a great deal of discretion. In addition, it creates a sizeable amount of uncertainty dueto the inconsistencies that are liable to result from a court's balancing of variousconsiderations.").

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courts have suggested considering the plaintiff's indigency and in-ability to travel to sue the defendant elsewhere.3 2 Because defen-dants cannot anticipate the wealth of potential plaintiffs, such eq-uitable concerns undermine predictability.

The second flaw of the balancing approach is that the factorsbalanced have no constitutional relevance. A plaintiff's poverty, forexample, has no apparent connection to the constitutional questionof the defendant's amenability to suit.3 3 Similarly, variations onthe reach of long arm jurisdiction that are based on the characterof the defendant's conduct" are inconsistent with principled dueprocess analysis. Where a defendant's conduct is intentionally tor-tious or of little social value, courts do not hesitate to assert juris-diction if the minimum due process requirements of causation, no-tice, and relevance are met. 5 Although protection of some conductmight be compelled by other constitutional provisions,3 the dueprocess clause alone does not support variations on jurisdiction

s See, e.g., Phillips v. Anchor Hocking Glass Corp., 100 Ariz. 251, 260, 413 P.2d 732,

738 (1966).3$ See Chancellor v. Lawrence, 501 F. Supp. 997, 1001 n.2 (N.D. Ill. 1980).34 Such variation is a common theme among courts and commentators. For example,

the Supreme Court in Kulko v. Superior Court, 436 U.S. 84, 96 (1978), asserted that the"effects test" of the RESTATEMENT, supra note 16, § 37, might be applicable when the defen-dant's conduct was commercial or tortious, but concluded that it was not applicable whenthe defendant's act was sending his daughter to the forum state to live with her mother. SeeNote, Fairness or Federalism in Supreme Court Minimum Contact Analysis?: World-WideVolkswagen Corp. v. Woodson, 37 WASH. & LEE L. Rav. 1341, 1354 (1980) (Kulko was con-cerned with the nature and quality of the defendant's activity). See also Davis v. St. Paul-Mercury Indem. Co., 294 F.2d 641, 649 (4th Cir. 1961); Hunt v. Nevada State Bank, 285Minn. 77, 110-12, 172 N.W.2d 292, 311-12 (1969) (extent of required contacts varies amonglibel, tort, and contract actions), cert. denied, 397 U.S. 1010 (1970); State ex rel. Sperandiov. Clymer, 581 S.W.2d 377, 382 & n.5 (Mo. 1979) ("effects test" is applicable only when adefendant's underlying activity was wrongful); Carrington & Martin, supra note 16, at 233-34, 240-42 (proper reach of long arm should be determined in part by the value of thedefendant's underlying conduct); Reese & Gaiston, Doing an Act or Causing Consequencesas Bases of Judicial Jurisdiction, 44 IowA L. REv. 249, 262-63 (1959) (long arm shouldextend most extensively where a defendant's underlying activity is inherently dangerous).

'5 See, e.g., Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493, 500-01 (1971) (dictum)(state court would have jurisdiction over foreign polluter whose emissions affected state);Bangor Punta Operations, Inc. v. Universal Mach. Co., 543 F.2d 1107, 1110 (5th Cir. 1976);Thorington v. Cash, 494 F.2d 582, 587 (5th Cir. 1974) (if defendant intentionally sent falseand misleading information into the forum, jurisdiction may be asserted without furtheranalysis); Gemini Enterprises, Inc. v. WFMY Television Corp., 470 F. Supp. 559, 564(M.D.N.C. 1979) (conspirator who knew, or should have known, that coconspirator wouldcommit conspiratorial acts in the forum is subject to its jurisdiction); J.E.M. Corp. v. Mc-Clellan, 462 F. Supp. 1246, 1255 (D. Kan. 1978) (alleged misrepresentation in long-distancetelephone call into state subjects caller to the state's jurisdiction).

' See text and notes at notes 46-47, 92-116 infra.

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that depend on the perceived social utility of the defendant'sactivities.

Considerations of general convenience-the plaintiff's, the de-fendant's, and the judicial system's-also lack constitutional foun-dation. Such considerations are instead the cornerstone of the dis-cretionary doctrine of forum non conveniens, which is unrelated toa forum's power over a defendant.8 7

The weight of the forum's interest in asserting jurisdiction alsois irrelevant to its power to do so. Within constitutional bounds, astate legislature has the right to decide which actions causing in-state effects it wishes to regulate in its courts."8 When a court re-stricts the reach of a state's long arm statute on the ground thatthe state has an insufficient interest in asserting jurisdiction, 9 itusurps that right by substituting its judgment for that of thestate's legislature.

Finally, the factor most commonly invoked in balancing analy-ses-a state's interest in providing its own residents with aforum4

q-is also of doubtful constitutional legitimacy. The priv-ileges and immunities clause of article IV41 prohibits state dis-crimination against the citizens of other states. Jurisdictional poli-cies that favor residents arguably constitute just such forbiddendiscrimination. 2

37 Under this doctrine, dismissal is appropriate when the suit may be brought in an-other forum, and either the defendant's convenience far outweighs that of the plaintiff or"trial in the chosen forum [is] inappropriate because of considerations affecting the court'sown administrative and legal problems." Koster v. Lumbermens Mut. Cas. Co., 330 U.S.518, 524 (1947). The doctrine applies only where jurisdiction and venue are proper in theoriginal forum. See generally F. JAws & G. HAZARD, supra note 14, § 12.29; RESTATEMENT,supra note 16, § 84.

3 See Owens v. Superior Court, 52 Cal. 2d 822, 831-32, 345 P.2d 921, 925 (1959); Nel-son v. Miller, 11 IMI. 2d 378, 387, 143 N.E.2d 673, 678 (1957).

" See, e.g., Wright v. Yackley, 459 F.2d 287, 291 (9th Cir. 1972) (denying jurisdictionover out-of-state physicians who rendered medical services because forum's interest in notdeterring out-of-state physicians from providing care was greater than its interest in re-dressing injury); Associated Am. Artists, Inc. v. Brevard Community College, 508 F. Supp.292, 294 (S.D.N.Y. 1981) (denying jurisdiction over defendant who rented goods from resi-dent plaintiff in part because of forum's interest in not deterring persons from dealing withNew York businesses).

40 See Caesar's World, Inc. v. Spencer Foods, Inc., 498 F.2d 1176, 1180 (8th Cir. 1974);California Note, supra note 16, at 626, 630; Comment, supra note 16, at 1346.

41 U.S. CONST. art. IV, § 2, cl. 1 ("The Citizens of each State shall be entitled to allPrivileges and Immunities of Citizens in the several States.").

42 See, e.g., Corfield v. Coryell, 6 F. Cas. 546, 551-52 (C.C.E.D. Pa. 1823) (No. 3230)(access to other states' courts is protected by the privileges and immunities clause); Simson,Discrimination Against Nonresidents and the Privileges and Immunities Clause of ArticleIV, 128 U. PA. L. REv. 379, 398-99 (1979). See also Brilmayer, supra note 16, at 107.

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If the purpose of due process protection is to ensure that per-sons can avoid suits in foreign states,48 unpredictable and noncon-stitutionally-based balancing tests should be rejected. Due processanalysis should be governed instead by a body of fixed rules. PartII outlines a uniform body of rules governing causation, notice, andrelevance that defines the extent of an individual's protection froma foreign state's authority and, by implication, the extent to whicha state can protect itself from foreign individuals' acts that willaffect it. Further restrictions on jurisdiction are legitimate onlywhen there is a separate constitutional limitation on the state'spower to regulate the defendant's underlying conduct.

This analysis still requires that courts consider the nature ofthe defendants' activities, 4 but it provides a constitutional basisfor doing so. Thus, additional restraints imposed in commercialcases, for example, should not be based on fairness to the defen-dant, 5 for he had the opportunity to protect himself from the au-

43 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Professor Mar-tin Redish has offered an alternative interpretation of the purpose of due process safe-guards, arguing that "the only concern of a principled due process jurisdictional analysisshould be the avoidance of inconvenience to the defendant." Redish, Due Process, Federal-ism, and Personal Jurisdiction: A Theoretical Evaluation, 75 Nw. U.L. REv. 1112, 1137(1981).

Redish's analysis goes both too far and not far enough. If he is correct, the fifth amend-ment's due process clause should limit federal jurisdiction to forums convenient for the de-fendant, and the fourteenth amendment's due process clause should limit state jurisdictionover its residents to convenient localities within the state. Yet Congress has authorized na-tionwide service of process for certain actions in the federal courts, e.g., 28 U.S.C. § 1335(1976) (interpleader), and the Supreme Court in dictum noted Congress's power to do so inMississippi Publishing Corp. v. Murphree, 326 U.S. 438, 442 (1946). Moreover, no court hasever read the fourteenth amendment's due process clause as prohibiting a state from forcingits residents to litigate in an inconvenient state court. See R. WmNmAu, supra note 16, §4.7, at 17-18 ("Within the state ... there is, so far as due process is concerned, statewidejurisdiction once the required state nexus is found."). See also Aguchak v. MontgomeryWard Co., 520 P.2d 1352 (Alaska 1974). Furthermore, the due process clause is not con-cerned solely with convenience. As the Court noted in World-Wide, even where it is conve-nient for a defendant to litigate in a foreign forum, a state cannot assert jurisdiction overhim if he has no contacts with it. 444 U.S. at 294.

The principle of jurisdictional due process proposed here preserves the territorial juris-diction rule of Pennoyer v. Neff, 95 U.S. 714 (1878). Under the proposed principle, a personcan avoid a foreign state's jurisdiction by forgoing acts that he anticipates will cause aneffect there. The principle also preserves for states the power, recognized in Hess v. Pawlos-ki, 274 U.S. 352 (1927), to require persons who knowingly cause effects in the state to con-sent to amenability to suit for those acts.

44 For courts that have done so, see cases cited supra note 34.45 See, e.g., Lakeside Bridge & Steel Co. v. Mountain State Constr. Co., 597 F.2d 596,

603 n.12 (7th Cir. 1979) (possibility of discouraging interstate transactions underscores un-fairness of asserting jurisdiction over out-of-state defendant who has only attenuated con-tractual links with forum), cert. denied, 445 U.S. 907 (1980).

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thority of the foreign state; nor should the restraints be based onthe forum state's lack of interest in asserting jurisdiction over thedefendant,4 for there are many reasons why a state might want toregulate commercial conduct that affects it. Rather, the restrictionsshould be justified by constitutional limitations on a state's powerto regulate interstate commerce.47 Rules implementing this analy-sis are developed in part III.

This approach-fixing uniform minimum due process require-ments and adding to them only where required by other constitu-tional provisions-serves several important purposes. It ensuresthat state jurisdiction is limited only by the Constitution's restric-tions, subject to which a state should be free to regulate in itscourts whatever foreign acts it wishes. Moreover, it preserves a uni-form body of due process standards, thereby facilitating predict-ability of results; at the same time, it provides jurisdictional rulesthat are flexible in their application.

II. DUE PROCESS REQUIREMENTS: CAUSATION, NOTICE, AND

RELEVANCE

A. Causation

Due process requires that a nonresident defendant havecaused an effect in the forum state before the state may assert ju-risdiction over him.48 Causation is less a definable phenomenonthan a label attached to an aggregation of common sense notions.

4' See cases cited supra note 39.47 U.S. CONST. art. I, § 8, cl. 3 authorizes Congress "[tlo regulate Commerce with for-

eign Nations, and among the several States . . . ." On the nature of negative commerceclause analysis, see text and notes at notes 94-96 infra.

48 RESTATEMENT, supra note 16, § 37 ("A state has power to exercise judicial jurisdic-tion over an individual who causes effects in the state by an act done elsewhere with respectto causes of action arising from these effects...."). See Reese & Galston, supra note 34, at260-63.

An intriguing conceptual question, albeit one that rarely arises in practice, is whetherthe defendant can be held responsible for an event caused by his failure to act. In Jahner v.Jacob, 252 N.W.2d 1, 8 (N.D. 1977), the court held that the due process causation require-ment is satisfied only by a voluntary act. Jurisdiction therefore could not be asserted overtwo defendants who had received misappropriated property mailed from North Dakota, be-cause no voluntary act tied them to the misappropriation or to the mailing.

Although the result in Jahner may be correct, the court stated the governing principletoo broadly. If a defendant realized that his failure to act would cause an event, and if hewas able to prevent the occurrence of that event, he had an opportunity to avoid beingliable to suit in the forum state. Therefore, the state could fairly assert jurisdiction overhim. The real problem is determining when a state may impose a duty to act on out-of-staters.

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Typical examples include a defendant shooting someone in the fo-rum state while standing in an adjacent state"9 and a defendantsending an injurious product into the state.5

Most difficulties in establishing causation arise when the de-fendant did not cause the effect directly. There is no conceptualdifficulty with attributing another person's actions to the defen-dant if he actually or constructively requested them and they areto his benefit. Thus, for jurisdictional purposes, a conspirator's ac-tions are attributed to his coconspirators, 1 an agent's actions areattributed to his principal, 52 and a party's contractual performance

" See RESTATEMNT, supra note 16, § 37 caveat a, para. 3." See, e.g., Gray v. American Radiator & Standard Sanitary Corp., 22 Ill. 2d 432, 176

N.E.2d 761 (1961). Causation is not always so straightforward. Consider Block Indus. v.DHJ Indus., Inc., 495 F.2d 256 (8th Cir. 1974), a products liability action in which thedefendant filed third-party complaints against the four fabric manufacturers from whom ithad purchased fabric resembling the material that went into the plaintiff's shirt. The recordshowed only that the injurious fabric had come from one of the defendants, but not whichone. Jurisdiction therefore was denied over all four because no single defendant had beenconnected to the plaintiff's injury.

0' See, e.g., Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326, 1342-44(2d Cir. 1972); Dixon v. Mack 507 F. Supp. 345, 352 (S.D.N.Y. 1980); Gemini Enterprises,Inc. v. WFMY Television Corp., 470 F. Supp. 559, 564 (M.D.N.C. 1979); McLaughlin v.Copeland, 435 F. Supp. 513, 529-32 (D. Md. 1977); Mandelkorn v. Patrick, 359 F. Supp. 692,696 (D.D.C. 1973). But see I.S. Joseph Co. v. Mannesmann Pipe & Steel Corp., 408 F. Supp.1023, 1024 (D. Minn. 1976) (antitrust venue case rejecting conspiracy theory).

The reluctance to assert jurisdiction in cases of alleged conspiracy results largely fromfear that plaintiffs will use cursory allegations of conspiracy to drag defendants into incon-venient forums. See Kipperman v. McCone, 422 F. Supp. 860, 873 n.14 (N.D. Cal. 1976).Casad, Long Arm and Convenient Forum, 20 KAN. L. REv. 1, 19-20 (1971), suggests treatingthe problem as one of proof: if the plaintiff alleges enough to show that he has a goodchance of proving conspiracy, the court should assert jurisdiction. This advice was followedin Professional Investors Life Ins. Co. v. Roussel, 445 F. Supp. 687, 696-97 (D. Kan. 1978)(noting that suit would be dismissed if subsequent discovery did not support the allega-tions). Cf. Glaros v. Perse, 628 F.2d 679, 682 (1st Cir. 1980) (no jurisdiction on conspiracytheory where plaintiff's allegations are imprecise and unsupported).

52 See, e.g., Nelson v. Miller, 11 IM. 2d 378, 390-91, 143 N.E.2d 673, 680 (1957). Thedefendant is not subject to the forum's jurisdiction, however, if his agent caused the injurywhile acting outside the scope of the agency. See, e.g., Haker v. Southwestern Ry., 176Mont. 364, 374, 578 P.2d 724, 728-29 (1978). It is unsettled whether jurisdiction over thedefendant may be based on another's act in the forum where the defendant subsequentlyratified that act. Compare Plaza Realty Investors Co. v. Bailey, 484 F. Supp. 335, 346-48(S.D.N.Y. 1979) (ratification insufficient) with State ex rel. Farmland Indus. Inc. v. Elliott,560 S.W.2d 60, 63 (Mo. 1977) (ratification sufficient).

The defendant can be deemed jurisdictionally responsible for another's act even thoughno formal agency relationship exists between the two. All that usually is required is that thedefendant have requested the act and that it be for his benefit. See Galgay v. Bulletin Co.,504 F.2d 1062, 1064-65 (2d Cir. 1974) (New York long arm statute does not require formalagency relationship to impute activity in forum state to out-of-state defendant); Barer v.Goldberg, 20 Wash. App. 472, 478-81, 582 P.2d 808, 872-73 (1978) (husband's in-state ac-

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may be imputed to another party to the contract.53

Most courts also recognize that the causation requirement issatisfied when an independent actor transmits the effects of thedefendant's actions to the forum.54 Many commentators 5 andcourts,58 however, have asserted that this principle should not ex-

tions for benefit of the marriage are grounds for asserting jurisdiction over wife). It thereforehas been held that a corporate agent was an agent of the defendant corporate officer whenthe agent's acts were requested by the officer and they inured to his benefit and not to thecorporation's. United States v. Montreal Trust Co., 358 F.2d 239, 243 (2d Cir.), cert. denied,384 U.S. 919 (1966); cf. Thames v. Gunter-Dunn Inc., 373 So. 2d 640, 642 (Ala. 1979) (acts ofcorporate agent not imputed to corporate officer who requested them when acts were to thebenefit of the corporation). Similarly, a corporate subsidiary will be deemed an agent of itsparent if the subsidiary acts at the behest of the parent and for its benefit. E.g., Finance Co.of Am. v. BankAmerica Corp., 493 F. Supp. 895, 907 (D. Md. 1980). Cf. Biltmoor Moving &Storage Co. v. Shell Oil Co., 606 F.2d 202, 207-08 (7th Cir. 1979) (defendant general contrac-tor subject to suit in forum because of independent subcontractor's performance there).

53 See, e.g., Biltmoor Moving & Storage Co. v. Shell Oil Co., 606 F.2d 202, 206-08 (7thCir. 1979).

"See Reese & Galston, supra note 34, at 262. The Supreme Court implicitly endorsedthis principle when it cited Gray v. American Radiator & Standard Sanitary Corp., 22 11. 2d432, 176 N.E.2d 761 (1961), with approval in World-Wide Volkswagen Corp. v. Woodson,444 U.S. 286, 298 (1980). In Gray, the Illinois Supreme Court upheld jurisdiction over anout-of-state manufacturer even though its product had been brought into the forum by apurchaser who was not under the control of the manufacturer. 22 Ill. 2d at 442, 176 N.E.2dat 766. See also Hapner v. Rolf Brauchli, Inc., 404 Mich. 160, 177, 273 N.W.2d 822, 827(1978) (Moody, J., dissenting).

Some courts have argued to the contrary. See, e.g., W.G. Bush & Co. v. Sioux City &New Orleans Barge Lines, 474 F. Supp. 537, 543 (M.D. Tenn. 1977) (repair company had nocontrol over eventual location of repaired barge); Louis Marx & Co. v. Fuji Seiko Co., 453 F.Supp. 385, 390-91 (S.D.N.Y. 1978) (defendant had no control over putative agent); Muellerv. Steelcase, Inc., 172 F. Supp. 416, 419 (D. Minn. 1959) (manufacturer had no control overlocation of product). The notice requirement, however, protects against any unfairness inasserting jurisdiction when the effect is transmitted by a third party. See text and notes atnotes 67-69 infra.

5 See, e.g., Brilmayer, supra note 16, at 93-94; Currie, supra note 16, at 555-56; Woods,supra note 16, at 891-92.

" For example, several courts have held that a merchant is not responsible for thepresence of his product in the forum when it was the plaintiff who took it there. See, e.g.,Mueller v. Steelcase, Inc., 172 F. Supp. 416, 419 (D. Minn. 1959); Dunn v. Upjohn Co., 350So. 2d 127, 129 (Fla. Dist. Ct. App. 1977). Cf. Craig v. General Finance Corp., 504 F. Supp.1033 (D. Md. 1980) (no jurisdiction over defendant in defamation action where plaintiffmoved to forum and defendant attempted to collect preexisting debt by informing plaintiff'snew employer of the debt). But cf. Lachman v. Bank of La., 510 F. Supp. 753, 757 (N.D.Ohio 1981) (jurisdiction asserted over defendant credit card company because it permittedplaintiff to continue using card after he moved to the forum).

Numerous courts have refused to assert jurisdiction over out-of-state physicians whosecontacts with the forum were limited to treatment of travelling patients who resided in theforum. See, e.g., Wright v. Yackley, 459 F.2d 287, 291 (9th Cir. 1972); Chancellor v. Law-rence, 501 F. Supp. 997, 1001-02 (N.D. Ill. 1980); Jackson v. Wileman, 468 F. Supp. 822, 824-25 (W.D. Ky. 1979); Woodward v. Keenan, 79 Mich. App. 543, 547-48, 261 N.W.2d 80, 82-83(1977) (per curiam).

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1982] Long Arm Jurisdiction

tend to situations where that actor is the plaintiff. 7 It might beargued that two recent Supreme Court decisions support this re-strictive causal approach. In Kulko v. Superior Court,58 the Courtheld that California could not assert jurisdiction in an action forchild support over a New York father who had allowed his daugh-ter to go to California to live with her mother.59 In World- WideVolkswagen Corp. v. Woodson," the Court held that Oklahomacould not assert jurisdiction in a products liability action over aNew York automobile dealer when the plaintiff bought a car inNew York and was injured in Oklahoma.61 Although neither opin-ion invoked the rationale that the plaintiff created the contact,both opinions suggest that the Court thought it relevant that theplaintiff had transmitted the effect of the defendant's out-of-state

Similarly, courts have commonly held that a defendant may not be sued in the forummerely because the plaintiff's business suffered economic loss there as a result of the defen-dant's conduct elsewhere. They reason that the defendant's acts had an effect in the forumonly because the plaintiff chose to locate its business there. See, e.g., Friedr. Zoellner Corp.v. Texas Metals Co., 396 F.2d 300, 303 (2d Cir. 1968) (construing New York statute); Ameri-can Eutectic Welding Alloys Sales Co. v. Dytron Alloys Corp., 439 F.2d 428, 433 (2d Cir.1971) (same). Cf. Hilferty v. Neesan, 506 F. Supp. 218, 220 (E.D. Pa. 1980) (no jurisdictionwhere the only events in the forum were plaintiff's residual pain and suffering for injuryincurred elsewhere); Leaks v. Ex-Lax, Inc., 424 F. Supp. 413, 415-17 (D.D.C. 1976) (same).

It also has been held that a buyer is not subject to suit in the seller's home state wherehis contacts with the forum were induced by the seller's advertising in the buyer's state.See, e.g., Conn v. Whitmore, 9 Utah 2d 250, 254-55, 342 P.2d 871, 874 (1959). Where thedefendant is the siren, jurisdiction exists even where the plaintiff created the contact, be-cause the defendant enticed him into doing just that. See Woodward v. Keenan, 79 Mich.App. 543, 548-50, 261 N.W.2d 80, 83 (1977) (subjecting doctors who advertise or solicitacross state lines to long arm jurisdiction).

See also the New York courts' curious refusal to exercise jurisdiction over a defendanton the basis of his agent's activities in New York if the agent is the plaintiff. Parke-BernetGalleries, Inc. v. Franklyn, 26 N.Y.2d 13, 19 n.2, 256 N.E.2d 506, 509 n.2, 308 N.Y.S.2d 337,341 n.2 (1970). For criticism of this doctrine, see Note, New York's Long-Arm Jurisdiction:The Case for the Agent-Plaintiff, 41 BROOKLYN L. Rav. 625, 657-64 (1975).

s7This rule probably is based on vague notions of fairness and an unwillingness to holdthe defendant responsible for the plaintiff's conduct. See Lakeside Bridge & Steel Co. v.Mountain State Constr. Co., 597 F.2d 596, 602-03 (7th Cir. 1979), cert. denied, 445 U.S. 907(1980). Similar concerns of fairness underlie the rule that a court should not exercise juris-diction over a defendant who was tricked into the forum by the plaintiff, see, e.g., Wyman v.Newhouse, 93 F.2d 313 (2d Cir. 1937), cert. denied, 303 U.S. 664 (1938), and the rule that acourt should not exercise in rem jurisdiction when the plaintiff brought the defendant's resinto the forum to obtain jurisdiction over him, see, e.g., Abel v. Smith, 151 Va. 568, 577-79,144 S.E. 616, 619 (Spec. Ct. App. 1928).

58 436 U.S. 84 (1978).

5 Id. at 86-90.40 444 U.S. 286 (1980).81 Id. at 287.


act to the forum state. 2

From a causal standpoint, however, there is no principled jus-tification for treating plaintiffs differently from other persons whotransmit effects. To the extent that it might be unfair to assertjurisdiction, the requirement of fair notice, which ensures that thedefendant had an opportunity to take precautions to avoid beingsubject to suit,63 assures sufficient protection. The fact that theplaintiff rather than the defendant or a third party created thecontact is irrelevant to the defendant's ability to take protectivemeasures if he perceives the risk. 4

Moreover, excluding plaintiff-created contacts can produce ab-surd results. In a recent Alaska products liability action, 5 for ex-ample, the defendant, a local merchant, filed a third-party com-plaint against the out-of-state manufacturer of the injuriousproduct. The manufacturer argued that it should not be subject tojurisdiction because the merchant was responsible for the presenceof the product in Alaska. Had that argument been accepted, themanufacturer would have been subject to jurisdiction if the origi-nal plaintiff sued it directly, because the effect was transmitted bythe middleman merchant; the manufacturer would not have beenamenable to suit there if the local merchant sought to impose thesame liability. 6

62 In Kulko, the Court stated:

Finally, basic considerations of fairness point decisively in favor of appellant's State ofdomicile as the proper forum for adjudication of this case, whatever the merits of ap-pellee's underlying claim. It is appellant who has remained in the State of the maritaldomicile, whereas it is appellee who has moved across the continent.

436 U.S. at 97. In World-Wide, the Court stated that "[i]t is foreseeable that the purchasersof automobiles sold by [the defendants] may take them to Oklahoma. But the mere 'unilat-eral activity of those who claim some relationship with a nonresident defendant cannot sat-isfy the requirement of a contact with the forum State."' 444 U.S. at 298 (quoting Hansonv. Denckla, 357 U.S. 235, 253 (1958)). Hanson does not support the rule discussed here,however. In that case, it was the testator who created the defendant trustee's contact withthe forum state, not the plaintiff beneficiaries. 357 U.S. at 238-39.

63 See text and notes at notes 67-69 infra.

For example, the defendant in Kulko could have refused to permit his daughter to goto California. Similarly, if the defendants in World-Wide could have anticipated liability,they could have taken protective measures or simply refused to sell the automobile. Accord,Comment, supra note 16, at 1354-55.

85 Volkswagenwerk, A.G. v. Klippan, GmbH, 611 P.2d 498 (Alaska), cert. denied, 449

U.S. 974 (1980).66 Id. at 502.

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B. Notice

Due process also requires that jurisdiction can be assertedonly over a defendant who could anticipate, '7 or who had "fair no-tice,""' that his out-of-state act would cause an effect in the forumstate.8 9 Courts have struggled with two aspects of the notice re-quirement: first, of what it is that notice must be had, and second,whether the defendant must purposefully desire the contact withthe forum state.

Prior to Kulko, it was thought that jurisdiction could be as-serted if the defendant reasonably could have foreseen or antici-pated that his actions would cause an effect in the forum.70 In thatcase, however, the Supreme Court indicated that the defendanthad to be able to anticipate "being 'haled before a [foreign]court.' 71 Read literally, this language requires that a defendant beable to anticipate actually being sued in the forum because of theeffect he caused there. 2

'7 There is some confusion as to whether the proper standard is foreseeability or antici-pation. A number of courts employ the former term. E.g., Pedi Bares, Inc. v. P&C FoodMkts., Inc., 567 F.2d 933, 937 (10th Cir. 1977); Buckeye Boiler Co. v. Superior Court, 71 Cal.2d 893, 902, 458 P.2d 57, 64, 80 Cal. Rptr. 113, 120 (1969). The distinction between foresee-ability and anticipation is probably purely semantic. If there is in fact a difference, however,the anticipation standard seems to have carried the day. See World-Wide Volkswagen Corp.v. Woodson, 444 U.S. 286, 295-97 (1980) ("foreseeability" of product's presence in foreignstate insufficient; defendant must be able to "reasonably anticipate being haled into courtthere"). See also Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326, 1341 (2dCir. 1972) (Friendly, J.) ("foreseeability" too low a standard; defendant "must know, or havea good reason to know, that his conduct will have effects in the [forum] state").

" See Woods, supra note 16, at 885-90. Justice Stevens introduced the term in hisconcurring opinion in Shaffer v. Heitner, 433 U.S. 186, 217-19 (1977) ("The Due ProcessClause affords protection against 'judgments without notice.'. . . The requirement of fairnotice also, I believe, includes fair warning that a particular activity may subject a person tothe jurisdiction of a foreign sovereign.") (quoting International Shoe Co. v. Washington, 326U.S. 310, 324 (1945)).

" See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295-97 (1980); LeascoData Processing Corp. v. Maxwell, 468 F.2d 1326, 1341 (2d Cir. 1972); R. WMNTRAUn, supranote 16, § 4.16, at 161-64. See generally Woods, supra note 16, at 883-89. The standard isobjective. See, e.g., Oswalt v. Scripto, Inc., 616 F.2d 191, 200-01 (5th Cir. 1980).

70 See RESTATEMENT, supra note 16, § 37; R. WmNTRAUB, supra note 16, § 4.16, at 161-62 (foreseeability of consequence or harm in forum essential to satisfaction of due processrequirements).

71 Kulko v. Superior Court, 436 U.S. 84, 97-98 (1977) (quoting Shaffer v. Heitner, 433U.S. 186, 216 (1977)). This standard was reiterated in World-Wide Volkswagen Corp. v.Woodson, 444 U.S. 286, 297 (1980).

7' See, e.g., Kellan v. Holster, 518 F. Supp. 175, 178 (M.D. Fla. 1981). The rule has beencriticized as circular: jurisdiction over the defendant depends on his foreknowledge of thatjurisdiction. See, e.g., Jay, supra note 30, at 443; California Note, supra note 16, at 621.

1982]


'73Although appropriate in commercial cases, and perhapsproperly applied in Kulko itself, such a rule cannot serve as a gen-eral standard for determining jurisdiction. For example, where anout-of-state defendant intentionally injures someone in the forum,no court would refuse to assert jurisdiction merely because the de-fendant had reason to believe the injury would not be discoveredor that the victim would select a different forum in which to sue.74

Such a result could be avoided by interpreting Kulko to requireanticipation of legal liability rather than actual suit on the basis ofthat liability.7 5 Even this rule would be too restrictive, however, forit would not permit a state to reach a defendant who caused a po-tentially (but not predictably) dangerous effect to occur within it.For example, where a nonresident defendant loaned his automobileto a friend who had an accident in the forum,71 a rule requiringanticipation of legal liability would deny a state jurisdiction overthe defendant unless he could have "reasonably anticipated" theaccident. Generally, it makes sense to define fair notice as anticipa-tion of an effect rather than anticipation of legal liability."7

The fair notice requirement sometimes is made more stringentby requiring that the defendant have acted "purposefully." TheSupreme Court in Hanson v. Denckla 7 8 so held, and the Court hasreaffirmed this rule consistently without ever defining it.79 It is un-

73 See text and notes at notes 101, 107-115 infra.74 See note 35 supra.7 "The Court in World-Wide seemed to equate the "haled into court" language with

being "subject to suit." 444 U.S. 286, 297 (1980).76 It generally is agreed that jurisdiction exists in these circumstances. See Davis v. St.

Paul Mercury Indem. Co., 294 F.2d 641, 643-48 (4th Cir. 1961); cf. Worthley v. RockvilleLeasecar, Inc., 328 F. Supp. 185, 187-88 (D. Md. 1971) (airplane).

7 In addition to consistency with precedent, see cases cited supra note 67, two otherconsiderations support such a reading. First, the Court has never indicated either the gene-sis or the explanation for the supposed heightened standard. Second, the purpose of the dueprocess standard set forth in World-Wide, to allow individuals "to structure their primaryconduct with some minimum assurance as to where [it] will and will not render them liableto suit," 444 U.S. at 297, is fulfilled by the traditional, more expansive standard.

78 357 U.S. 235, 253 (1968) (jurisdiction may be asserted over a defendant only if he"purposefully avails [him]self of the privilege of conducting activities within the forumstate, thus invoking the benefits and protections of its laws").

79 See, e.g., Rush v. Savchuk, 444 U.S. 320, 329 (1980); World-Wide Volkswagen Corp.v. Woodson, 444 U.S. 286, 297 (1980); Shaffer v. Heitner, 433 U.S. 186, 216 (1977). It hasbeen suggested that the requirement should be ignored as careless dictum. See Phillips v.Anchor Hocking Glass Corp., 100 Ariz. 251, 256, 413 P.2d 732, 735 (1966); InternationalHarvester Co. v. Hendrickson Mfg. Co., 249 Ark. 298, 301-03, 459 S.W.2d 62, 64-65 (1970).But see Comment, supra note 16, at 1355 (if "defendant has met the purposeful affiliationrequirement of Hanson v. Denckla, it has fair notice").

[49:156


clear whether it is the defendant's underlying act or the contactitself that must have been purposeful. Under the former approach,a defendant purposefully avails himself of a contact with the forumstate as long as he had fair notice that his act would have an effectthere.80 Under this definition, however, Kulko appears to bewrongly decided. Kulko certainly knew that his child would go toCalifornia, and he should not have been surprised that she tookadvantage of benefits provided by the state once she was there. Yetthe Court concluded that Kulko's action was not purposeful.81 Thecase therefore suggests that the contact itself must be purposeful.Kulko's act was not purposeful because he neither desired hisdaughter's presence in California nor received any personal benefitfrom her presence there.82

This concept of purposefulness, emphasizing the contactrather than the act, has been used by lower courts to justify pro-tection of local merchants who knowingly make sales to customersfrom other states, but who generally do little business with personsfrom those states." Under this reasoning, a merchant who sells toan occasional nonresident customer may know that his product isgoing to a foreign state, but because his business does not dependon foreign sales, he has no interest in the product's presence there.

Although the purposefulness requirement seems to achieve thecorrect result in Kulko and the local merchant cases, jurisdictional

so See Poyner v. Erma Werke GmbH, 618 F.2d 1186, 1191 (6th Cir. 1980) ("purposeful"

if defendant knew his actions would have an effect in the forum state), cert. denied, 449U.S. 841 (1981); King v. Halley Chevrolet Co., 462 F.2d 63, 67 & n.4, 68 (6th Cir. 1972)("purposeful" if defendant could foresee that his actions would have an effect in the forumstate).

In World-Wide, Justice White intimated that the point of the purposeful availmentrule was to ensure that the defendant had fair notice that his act might render him liable tosuit in the forum state: "When a corporation 'purposefully avails itself of the privilege ofconducting activities within the forum State,'. . . it has clear notice that it is subject to suitthere and can act to alleviate the risk of burdensome litigation. . . ." 444 U.S. at 297 (quot-ing Hanson v. Denckla, 357 U.S. 235, 253 (1968)). See also Woods, supra note 16, at 885.

81 436 U.S. 84, 93-94 (1978). The Court emphasized that any benefits of California resi-dency went to the child rather than her father and that Kulko did not purposefully seek anybenefits from his daughter's contacts.

9' Id. at 94 n.7.83 See, e.g., Khalaf v. Bankers & Shippers Ins. Co., 404 Mich. 134, 156-57, 273 N.W.2d

811, 820-21 (1978) ("The generating cause is not the [defendant's] desire to enlarge his busi-ness into Michigan, but, rather, the Michigan customer's desire to do business with the[defendant]. A localized business.., does not depend on multi-state distribution to gener-ate volume. Out-of-state effects are but an incident of the business."); State ex rel. Sper-andio v. Clymer, 581 S.W.2d 377, 382-83 (Mo. 1979); Pellegrini v. Sachs & Sons, 522 P.2d704, 707 (Utah 1974).

1982]


analysis under the due process clause should not turn on whether adefendant "consciously desires" the contacts created by his acts inaddition to the acts themselves. Universal application of the rulewould produce absurd results. Consider the case of a defendantwho pollutes in one state knowing that the pollutants will be car-ried to the forum state. Although the Supreme Court has suggestedthat the forum state should have jurisdiction,8 it is unlikely thatthe polluter "consciously desires" the pollutants' presence in theforum; if the polluter has any desire regarding his effluents, it isprobably that they vanish. 5

C. Relevance

Due process also requires that a state may only assert longarm jurisdiction if the effect caused by the defendant is related tothe cause of action.8 6 Although easily grasped, the concept of a rel-evant event is difficult to articulate.87 Professor Lea Brilmayer hassuggested a readily applicable test: an event is relevant for jurisdic-tional purposes if it is substantively relevant to the cause of ac-tion.8 This test is grounded on what most agree is the theoreticaljustification for the relevancy requirement: only a substantivelyrelevant event gives the state a legitimate interest in adjudicatingthe controversy. 9 It is difficult to imagine a situation where thestate would have such an interest if a substantively relevant eventhad not occurred within its borders.90

Ohio v. Wyandotte Chems. Corp., 401 U.S. 493, 500 (1971).

85 Although the purposefulness requirement is inappropriate as a general jurisdictional

guide, part III argues that it is proper to focus on whether the defendant consciously soughtsome benefit from his contact with the forum in cases involving interstate commercialactivity.

S. The RESTATEMENT, supra note 16, combines relevance and causation: "A state hasthe power to exercise judicial jurisdiction over an individual who causes effects in the stateby an act done elsewhere with respect to causes of action arising from these effects. . ....

Id. § 37 (emphasis added). See also Reese & Galston, supra note 34, at 264.87 The cases and the literature provide little guidance to distinguish relevant from irrel-

evant events. The RESTATEMENT, supra note 16, § 37, requires that the cause of action "arisefrom" the effects of the defendant's actions in the forum state, without explaining what thatmeans. von Mehren and Trautman, supra note 15, at 1144-45, merely state that the cause ofaction must "arise out of" or be "intimately related to" the defendant's contacts with theforum state.

Brilmayer, supra note 16, at 82."' See Jonnet v. Dollar Savings Bank, 530 F.2d 1123, 1140 (3d Cir. 1976) (Gibbons, J.,

concurring) (due process prevents state from asserting jurisdiction without a "palpable" in-terest in the controversy that is "rationally connected with forum policy"); Comment, supranote 16, at 1345-49.

,0 Brilmayer, supra note 16, at 83-84, cites only one lower court opinion in which a

[49:156


The suggested test is too broad, however, for not every sub-stantively relevant event gives a state a legitimate interest in as-serting jurisdiction over the defendant. Consider again Kulko. Al-though the Kulkos' marriage while on a California vacation maynot have been a substantively relevant event in an action for childsupport, their daughter's conception there undeniably would be.Yet it would be tenuous to argue that California would have a "le-gitimate interest" in asserting jurisdiction over Kulko if his daugh-ter had been conceived there during a brief vacation.

In most cases, intuition suffices to distinguish relevant fromirrelevant events. For example, it seems obvious that Kulko's visitsto California years before the child support action arose and hismarriage to Mrs. Kulko during one of those visits could not pro-vide California with jurisdiction over him.91 Although theBrilmayer proposal may be as close as one can come to a compre-hensive test, it remains necessary to rely on intuition as a generalguide.

III. ADDITIONAL CONSTITUTIONAL REQUIREMENTS: COMMERCIAL

CASES

Constitutional restrictions on the power of states to regulatecertain activities impose additional limitations on state long armjurisdiction beyond the minimum due process requirements out-lined in part II. For example, it has been suggested that the firstamendment requires limitations on the long arm's reach to avoiddeterring newspapers from disseminating information in foreignstates.92 Similarly, Kulko could be supported on the ground that

substantively irrelevant event has been held to support jurisdiction: Cornelison v. Chauney,16 Cal. 3d 143, 545 P.2d 264, 127 Cal. Rptr. 352 (1976) (truck driver involved in an accidenton his way to the forum state).

91 The majority opinion acknowledged this inadequacy. 436 U.S. at 92-93.9' See New York Times Co. v. Connor, 365 F.2d 567 (5th Cir. 1966), where the court

refused to assert jurisdiction over the Times where it was alleged to have circulated defama-tory articles in Mississippi and Alabama. Reasoning that "First Amendment considerationssurrounding the law of libel require a greater showing of contact to satisfy the due processclause than is necessary in asserting jurisdiction over other types of activity," id. at 572, thecourt held that jurisdiction should only be asserted over an out-of-state newspaper if itscirculation in the forum is sufficient to offset the risk of being subject to suit there. See alsoBuckley v. New York Post Corp., 373 F.2d 175 (2d Cir. 1967); Buckley v. New York TimesCo., 338 F.2d 470, 475 (5th Cir. 1964) (Brown, J., concurring in part and dissenting in part);Carrington & Martin, supra note 16, at 240-43. But see Church of Scientology v. Adams, 584F.2d 893, 899 (9th Cir. 1978); Anselmi v. Denver Post, Inc., 552 F.2d 316, 324 (10th Cir.),cert. denied, 432 U.S. 911 (1977); Curtis Publishing Co. v. Golino, 383 F.2d 586 (5th Cir.1967) (asserting jurisdiction over out-of-state magazine publisher); Comment, Constitu-

19821


the Constitution limits a state's regulatory power over family mat-ters."3 These explanations rest on the premise that in areas wherethe Constitution limits the states' regulatory power, the reach oflong arm jurisdiction should be concomitantly limited so that itwill not impinge unduly on the protected conduct. In the contextof commercial transactions, this part explores the constitutionaljustifications for stricter limits on jurisdiction and proposes addi-tional rules that serve these purposes.

A. Rules Based on the Commerce Clause

The commerce clause94 requires courts to invalidate state lawsthat unreasonably impair interstate commerce.95 Thus, a state'sability to assert jurisdiction over nonresidents who have commer-cial contacts with its citizens is constrained by "the national inter-est in keeping interstate commerce free from interferences whichseriously impede it." 96 Jurisdictional standards may impair com-merce in two ways. First, the threat of liability to suit in a foreignjurisdiction discourages transactions with foreseeable foreign ef-fects. 97 Second, assertion of long arm jurisdiction may frustrate the

tional Limitations to Long Arm Jurisdiction in Newspaper Libel Cases, 34 U. CHm. L. REv.436 (1967).

" Although there is no clear support for such a proposition in the Constitution, severalSupreme Court decisions have held that the Constitution limits the power of a state tointrude in family affairs. See, e.g., Moore v. City of E. Cleveland, 431 U.S. 494, 499 (1977)(striking down zoning ordinance limiting occupancy to a single family because it infringedon "freedom of personal choice in matters of marriage and family life" without a compellingjustification); Roe v. Wade, 410 U.S. 113 (1973) (right to abortion); Griswold v. Connecticut,381 U.S. 113 (1965) (right to use contraception). See generally Developments in theLaw-The Constitution and the Family, 93 HARv. L. REv. 1156 (1980). At the least, Kulkoclearly stands for the proposition that family concerns deserve special consideration in dueprocess analysis. Accord, Demarest v. Superior Court, 103 Cal. App. 3d 791, 798, 165 Cal.Rptr. 641, 644 (1980).

4 U.S. CONST. art. I, § 8, cl. 3. See note 47 supra.The Supreme Court has described the nature of the "dormant commerce clause"

thus:For a hundred years it has been accepted constitutional doctrine that the com-

merce clause, without the aid of Congressional legislation, thus affords some protectionfrom state legislation inimical to the national commerce, and that in such cases, whereCongress has not acted, this Court, and not the state legislature, is under the commerceclause the final arbiter of the competing demands of state and national interests.

Southern Pac. Co. v. Arizona, 325 U.S. 761, 769 (1945). See also Raymond Motor Transp.,Inc. v. Rice, 434 U.S. 429 (1978) (state highway regulations); Bibb v. Navajo Freight Lines,Inc., 359 U.S. 520 (1959) (state highway regulations); Dean Milk Co. v. Madison, 340 U.S.349 (1951) (access of foreign sellers to local markets).

" Southern Pac. Co. v. Arizona, 325 U.S. 761, 775-76 (1945).97 See Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502, 507 (4th Cir. 1956)

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19821 Long Arm Jurisdiction

reasonable expectations of commercial actors, thereby decreasingcommercial certainty.98 Although certainty and predictability areessential in commercial transactions, the permissible reach of longarm jurisdiction is least well defined in this context.99

The constitutional interest in facilitating interstate commerceseems to require additional jurisdictional limitations beyond theminimum safeguards of causation, notice, and relevance providedby due process.100 Jurisdiction should not be asserted over a defen-

(Sobeloff, J.) (denying North Carolina jurisdiction over New York manufacturer whoshipped goods to plaintiff in North Carolina):

[T]o sustain jurisdiction here... would involve the danger of grave burdens and im-pediments to interstate commerce, if the door should be opened to similar legislationby other States .... [L]et us consider the hesitancy a California dealer might feel ifasked to sell a set of tires to a tourist with Pennsylvania license plates, knowing that hemight be required to defend in the courts of Pennsylvania.a suit for refund of thepurchase price or for heavy damages in case of accident attributed to a defect in thetires.

See also Wright v. Yackley, 459 F.2d 287, 291 (9th Cir. 1972) (limiting long arm so as not todeter out-of-state physicians from rendering medical services to residents); Associated Am.Artists, Inc. v. Brevard Community College, 508 F. Supp. 292, 294 (S.D.N.Y. 1981) (limitinglong arm so as not to deter persons from dealing with forum merchants); Gelineau v. NewYork Univ. Hosp., 375 F. Supp. 661, 667-68 (D.N.J. 1974) (limiting long arm so as not todeter out-of-state physicians from rendering medical services to residents).

It has been suggested, however, that limitations on the long arm cannot ease the overalldeterrence to interstate transactions caused by potential jurisdictional costs, because pro-tecting one party from liability to suit in his opponent's preferred forum merely transfersthe deterrent effect to the latter. See R. CRAMTON, D. CURRm & H. KAY, supra note 16, at551. This criticism is flawed for two reasons. First, in many cases one party will be able totake protective measures without forgoing the transaction, while the other party will not.For example, if a mail order house cannot sue foreign purchasers in its home forum, it willmerely increase its insurance and raise prices; it will not abandon the mail order business.At best, then, the criticism is relevant only in those cases where neither party is able to takeprotective measures. Second, a person is more likely to be deterred by the risk of being suedin a distant forum than by the risk of having to travel to a distant forum to sue. In thelatter situation, the person confronted with the risk at least knows that the decision to bearthe jurisdictional burden is in his own hands.

. The jurisdictional rule offered here can be viewed as analogous to the damages ruleof Hadley v. Baxendale, 9 Ex. 341, 156 E.R. 145 (1854): both limit legal liability to thatwhich reasonably could have been anticipated by the defendant and so reduce commercialrisk. Cf. C. McCoRMICK, HANDBOOK ON THE LAW OF DAMAGES § 138 (1935) (discussing Had-ley). Reducing commercial risk or uncertainty facilitates commerce. See, e.g., The Bremen v.Zapata Off-Shore Co., 407 U.S. 1, 13-14 (1972). Cf. In-Flight Devices Corp. v. Van DusenAir, Inc., 466 F.2d 220, 233-34 (6th Cir. 1972) (fairness requires the protection of the defen-dant's reasonable expectations).

"Lakeside Bridge & Steel Co. v. Mountain State Constr. Co., 445 U.S. 907, 911 (1980)(White, J., dissenting from denial of certiorari) (confusion of current jurisdictional stan-dards "may well have a disruptive effect on commercial relations in which certainty of re-sults is a prime objective").

100 Others have looked to the commerce clause and the federal interest in facilitatinginterstate commerce as grounds for limiting state long arm jurisdiction. See Carrington &

The University of Chicago Law Review [49:156

dant whose conduct is commercial in nature-that is, over one whoputs a product into the stream of commerce or enters into a con-tract-unless the following two additional conditions are met.First, the defendant must have been able to anticipate that hisconduct might lead to his being sued in the forum state. Second, inlight of this perceived risk he must have had a reasonable opportu-nity to alter, without being forced to forgo, the conduct thatcaused the effect in the state."'

The Supreme Court has emphasized that the commerce clausedoes not prohibit imposition of burdens on nonresident commer-cial actors where they have an opportunity to pass the burdensalong to residents.1 0 2 The proposed rules ensure that whenever a

Martin, .supra note 16, at 234 (citing cases); Developments, supra note 16, at 983-87; Com-ment, supra note 16, at 1347-48 & n.59. Cf. Horowitz, The Commerce Clause as a Limita-tion of State Choice-of-Law Doctrine, 84 HAnv. L. REv. 806 (1971) (federal interest in facili-tating interstate commerce should be a factor in choice of law decisions).

Prior to International Shoe Co. v. Washington, 326 U.S. 310 (1945), the commerceclause was occasionally invoked to deny states jurisdiction over foreign interstate carrierswhen the carriers had no lines and operated no service within the forum state, the cause ofaction arose outside the forum state, and the plaintiff did not live in the forum wheli thecause of action accrued. Denver & R.G.W.R.R. v. Terte, 284 U.S. 284, 287 (1932); Davis v.Farmers Coop. Equity Co., 262 U.S. 312, 315 (1923). See Scanapico v. Richmond, F. & P.Ry., 439 F.2d 17, 25-28 (2d Cir. 1970) (on reconsideration en banc) (Friendly, J.) (tracinghistory of commerce clause limitations on jurisdiction). Cf. F. JAMEs & G. HAZARD, supranote 14, § 12.27 (arguing that the cases "overlap and complement the broader and moreflexible doctrine of forum non conveniens").

This dated line of precedent is inapplicable to the principle argued for here: that thecommerce clause be used to deny a state jurisdiction even where the cause of action is re-lated to the state. See Missouri ex rel. St. Louis, B. & M. Ry. v. Taylor, 266 U.S. 200, 207(1924) (Davis doctrine inapplicable when cause of action is related to the forum); Cardozo,The Reach of the Legislature and the Grasp of Jurisdiction, 43 CoRNmEU L.Q. 210, 214(1958).

101 Since World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), a few courtshave held that jurisdiction may be asserted over a defendant who knew his actions mightrender him liable to suit in the forum and who had an opportunity to take protective mea-sures in light of that risk. See, e.g., Plant Food Co-op v. Wolfkill Feed & Fertilizer Corp.,633 F.2d 155, 159-60 (9th Cir. 1980); Puerto Rico v. The SS Zoe Colocotroni, 628 F.2d 652,669-70 (lst Cir. 1980), cert. denied, 450 U.S. 912 (1981); Lachman v. Bank of La., 510 F.Supp. 753, 757 (N.D. Ohio 1981). In National Egg Co. v. Bank Leumi le-Israel B.M., 504 F.Supp. 305, 312 (N.D. Ga. 1980), however, the court thought it sufficient that the defendantcould have avoided liability to suit in the forum by forgoing the transaction altogether. Re-quiring that the defendant relinquish interstate activity to avoid jurisdictional liabilitywould be impermissible under the rules developed in this comment.

'02 See General Trading Co. v. State Tax Comm., 322 U.S. 335, 338 (1944) (state usetax may be passed on). See also McGoldrick v. Berwind-White Coal Mining Co., 309 U.S.33, 45-46 n.2 (1940) (recognizing the "danger that, to the extent that the burden falls oneconomic interests without the state, it is not likely to be alleviated by those political re-straints which are normally exerted on legislation where it affects adversely interests withinthe state"); Brilmayer, supra note 16, at 95-96 (arguing for restrictions on long arm jurisdic-


state asserts jurisdiction over an outsider on the basis of a transac-tion with a resident, the outsider will have had an opportunity topass the cost of jurisdictional liability on to the resident.

The first rule embraces in the limited commercial context the"anticipation of suit" standard rejected in its general applicationin part II-B. 03 The second rule protects the same defendants asthe "purposefully avails" standard rejected as a general jurisdic-tional guide;10' imposition of jurisdictional risks is likely to deteronly those defendants who do not consciously seek benefits fromtheir commerical contacts with foreign states. The rules provide aconstitutional rationale for limiting jurisdiction where a commer-cial plaintiff acts unilaterally, without resorting to the artificialplaintiff-created contacts rule,10 5 and they justify protection ofcommercial activities without reliance on nonconstitutionally-based forum interest analyses. 0 6

B. Application of the Rules

These rules explain a number of doctrines that courts have de-veloped to limit the long arm in commercial cases. For example,the rules support the commonly accepted proposition that jurisdic-tion should not be asserted over an out-of-state merchant who onlyoccasionally sells to residents of the forum state.10 7 The minimumdue process requirements as formulated in part II pose no obstacleto jurisdiction if the local merchant has notice that his customer isan out-of-state resident, yet the merchant would not reasonablyexpect that the sale might lead to a suit against him in the buyer'shome state; he is more likely to view his customer's talk of a dis-tant destination as pleasant conversation than as a warning of apotential inconvenient suit. Moreover, the merchant has no realopportunity to charge the occasional nonresident a higher price inlight of the unusual jurisdictional risks imposed by the transaction.

The rules also justify the courts' emphasis on the frequency,regularity, and nature of the commercial defendant's contacts with

tion over out-of-staters who have no opportunity to pass costs on to residents).103 See text and notes at notes 71-77 supra.

I" See text and notes at notes 78-85 supra.,05 See text and notes at notes 55-66 supra.'0 See text and notes at notes 38-42 supra.207 See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 296 (1980) (re-

jecting foreseeability standard because it would subject local merchants-tire retailers andsoft drink concessionaires-to the jurisdiction of foreign forums); Khalaf v. Bankers & Ship-pers Ins. Co., 404 Mich. 134, 156-57, 273 N.W.2d 811, 820-21 (1978).

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the forum state.108 The existence of transactions between the de-fendant and forum residents besides the one at issue favors asser-tion of jurisdiction, because the defendant who regularly does busi-ness affecting the forum state has greater warning of the risk ofbeing sued there and a better chance to alter his conduct in light ofthat risk. Similar considerations apply to firms engaged primarilyin interstate business. 0 9

The size of the transaction and the extent of the negotiationspreceding it also are relevant in considering whether the commerceclause restricts the exercise of the long arm. 10 The courts' concernwith protecting passive purchasers is illustrative."' A passive pur-chaser buys from a foreign seller's inventory at an unnegotiatedprice;1 2 almost by definition, he is unable to alter the terms of thetransaction. Moreover, most transactions of this sort are so smallthat the purchaser has no incentive to diminish the risk of jurisdic-tional liability rather than simply forgo the transaction entirely.The transaction costs of, for example, procuring insurance, negoti-ating a forum selection clause,'13 or altering the price to make ac-ceptance of the risk palatable, are too great to make such restruc-

108 See, e.g., Puerto Rico v. The SS Zoe Colocotroni, 628 F.2d 652, 668-70 (1st Cir.

1980), cert. denied, 450 U.S. 912 (1981); Standard Fittings Co. v. Sapag, S.A., 625 F.2d 630,642 n.23 (5th Cir. 1980), cert. denied, 450 U.S. 918 (1981); Voorlas Mfg. Co. v. Mars SignalLight Co., 481 F. Supp. 828, 830 (E.D. Wis. 1979); Wisconsin Can Co. v. Banite, Inc., 88F.R.D. 597, 600-01 (N.D. Ill. 1980); Buckeye Boiler Co. v. Superior Court, 71 Cal. 2d 893,904-06, 458 P.2d 57, 65-66, 80 Cal. Rptr. 113, 121-22 (1969).

109 von Mehren & Trautman, supra note 15, at 1167-68.

.10 See, e.g., In-Flight Devices Corp. v. Van Dusen Air, Inc., 466 F.2d 220, 233 (6th Cir.

1972); Galaxy Int'l, Inc. v. White Stores, Inc., 88 F.R.D. 311, 321-22 (W.D. Pa. 1980); Com-munication Equip. & Contracting Co. v. Anchorage, 498 F. Supp. 632, 634 (M.D. Ala. 1980);Controlled Metals, Inc. v. Non-Ferrous Int'l Corp., 410 F. Supp. 339, 343 (E.D. Pa. 1976).

121 See, e.g., Whittaker Corp. v. United Aircraft Corp., 482 F.2d 1079, 1084, 1085 (1stCir. 1973); Architectural Bldg. Components Corp. v. Comfort, 528 P.2d 307, 310 (Okla.1974).

112 See In-Flight Devices Corp. v. Van Dusen Air, Inc., 466 F.2d 220, 233 (6th Cir. 1972)("The buyer ... is frequently a relatively passive party, simply placing an order, acceptingthe seller's price and terms as stated in his product advertising and agreeing only to pay asum upon receipt of the goods or services."). Mail order consumers are a typical example.See Yankee Metal Prods. Co. v. District Court, 528 P.2d 311, 313 (Okla. 1974) (active/pas-sive purchaser distinction "has the effect of protecting the ordinary 'mail order catalogue'consumer who merely orders a stock item of merchandise from a distant state, from thejurisdiction of the courts of the distant state").

13 The Supreme Court upheld the validity of such clauses in National Equip. Rental,

Ltd. v. Szukhert, 375 U.S. 311 (1964). See also The Bremen v. Zapata Off-Shore Co., 407U.S. 1 (1972).

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turing worthwhile.114 The long arm therefore must be restricted insuch cases.

On the other hand, when a transaction is for a large amount oris preceded by lengthy negotiations, the transaction costs of reduc-ing the risk of liability by acquiring insurance or altering the termsof the bargain become reasonable. Moreover, the more significantthe transaction is, the more likely it is that the parties anticipatedunusual costs; in the absence of a forum selection clause to thecontrary, jurisdiction should be permitted if consistent with mini-mum due process requirements. Even in passive purchaser situa-tions, failure to restructure the transaction should not automati-cally suggest an inability to do so, where the transaction is ofconsiderable magnitude or for unique goods.115

C. Summary

The rules proposed here strike the proper balance betweenstate jurisdictional interests and the federal interest in encouraginginterstate commerce. The federal interest is satisfied, because it re-quires only the protection of those who are unaware that a transac-tion might lead to suit in the forum and of those who would beunable to conduct interstate transactions if they had to bear therisk of jurisdictional liability. The interests of the state are pro-tected, because it may assert jurisdiction over anyone who has sig-nificant commercial contacts with it. The interests of commercialactors also are protected, because they can predict with some cer-tainty where their conduct will render them liable to suit.11 The

11' In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980), the Su-

preme Court stated that when a commercial defendant "has clear notice that it is subject tosuit [in the forum state it] can act to alleviate the risk of burdensome litigation by procuringinsurance, passing the expected costs on to customers, or, if the risks are too great, severingits connection with the state." The rules developed here reject the final alternative, for thecommerce clause requires that commercial actors not be forced to choose between forgoingan interstate transaction or accepting the risk of being subject to suit in a distant state.Some protective action short of giving up the transaction must be available.

"' But see Whittaker Corp. v. United Aircraft Corp., 482 F.2d 1079 (1st Cir. 1973),where three out-of-state defendants each entered into contracts of similar magnitude topurchase the same goods from the plaintiff. One defendant actively participated in the pro-duction process by providing specifications and sending representatives to oversee the pro-cess. The other two defendants merely asked for what the first one received. Jurisdictionwas upheld as to the first defendant and denied as to the other two. The rules outlinedabove would reject the formalistic active/passive distinction and focus instead on the magni-tude and underlying character of the transaction.

"' The rules focus on the reasonable expectations of parties to a transaction. ContrastLakeside Bridge & Steel Co. v. Mountain State Constr. Co., 597 F.2d 596 (7th Cir. 1979),

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rules therefore encourage efficient treatment of potential jurisdic-tional costs in interstate transactions: when a person is aware of apotential cost-that is, when he realizes that he and the otherparty to a transaction have different jurisdictional preferences-hemust consider that potential cost in structuring the transaction.

CONCLUSION

This comment has argued that the current balancing approachused in long arm analysis should be replaced with a body of fixedrules. The proposed rules generally are consistent with the resultsof decided cases, but provide a coherent framework for analysisthat emphasizes predictability of result and fidelity to theConstitution.

Under this analysis, due process in the exercise of the longarm is provided by minimum requirements of causation, notice,and relevance. These standards give individuals a sufficient oppor-tunity to avoid a forum's jurisdiction and ensure that the forumhas a legitimate interest in regulating the conduct at issue. Thesedue process requirements will allow states expansive long armpower. If further limits on the long arm are imposed, they must begrounded on a constitutional principle restricting a state's power toregulate the particular conduct at issue. Using commercial cases asan illustration, this comment has explored the jurisdictionalramifications of the negative commerce clause. The implications ofother constitutional guarantees remain for future study.

Mark P. Gergen

cert. denied, 445 U.S. 907 (1980), denying jurisdiction over a defendant who entered into acontract that elicited another's performance in the state because performance there was notrequired by the contract. The court distinguished between defendants who know a contractwill elicit performance in the forum and those who insist on performance there. Yet both areequally able to take protective measures in light of the risk of being sued in the forum. Thecourt argued that absent such a rule, a party to a contract could potentially be liable to suitwherever the other party chose to perform. 597 F.2d at 603. A party will be liable to suit inthe forum state, however, only when he reasonably might have expected the other party toperform there. Moreover, the rules offered here would ensure that he had an opportunity totake protective measures in light of that risk. The Seventh Circuit elevated form over sub-stance by focusing on the formal provisions of the contract rather than on the reasonableexpectations of the parties to the contract. Cf. Note, Lakeside Bridge & Steel Co. v. Moun-tain State Construction Co.: Inflexible Application of Long-Arm Jurisdiction Standards tothe Nonresident Purchaser, 75 Nw. U.L. REv. 345, 347 (1980) (criticizing Lakeside Bridgerule for its rigidity).

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constitutional limitations on state long arm jurisdiction

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